Modern business practices have to a large extent made the handling of actual cash with the inherent dangers of theft and loss unnecessary in many sectors of our economy. These include banking, large retail stores, and a large variety of other businesses where articles are charged to an account, the individual billed, and the bill subsequently paid by check. In such businesses the actual amounts of money owed and to be credited are kept track of largely through the use of computers which record detailed transaction data, including amounts and the identity of the sellers and purchasers. Banks, credit granting organizations, and large retail stores frequently use computers for the purpose of maintaining customer accounts, debiting and crediting such accounts as the need arises.
However, the individual still must have fairly substantial amounts of cash for making purchases from other individuals, food stores, gasoline stations, and the like. It is believed that there is a long felt need in this area to make the advantages of a "cashless society" available to individuals for small transactions. Such a system, to be practical, would of necessity have to be able to take care of both purchases and sales. Further, in order for such a system to be practical and allow people to have faith in the system, it would be helpful to provide means in such a system to maintain sufficient records of identities of both purchasers and buyers which information would be available in written or in printed form on a regular statement period basis. A further valuable adjunct to such a system would be to allow the use of devices with which everyone is familiar such as, for example, a credit card or credit card-like device for storing the record of the actual transfer of merchandise and credit. Such cards having built-in storage registers and certain rudimentary logic capabilities have been used in the past but are believed to have been largely limited to use with a standard terminal such as a point of sale terminal in a department store, cash issuing terminals, and the like.
In addition to the need for "cashless" transactions it would also be advantageous if such a system could be extended to perform the function of checks and a checking account. In other words, when the credit card-like device was presented to a person in payment for merchandise or services the recording of the transaction by both the seller and purchaser would automatically result in a debit notice or memorandum being placed in the purchasers card and a notice of receipt of the `promise to pay` placed in the seller's account. At some point in the future when the seller presents the electronically recorded account invoices to a central payee, or bank, it is at this time that the purchaser's account would actually be debited. As will be evident, such a transaction would differ from the above mentioned cash transfer operation in that the actual time of debiting of the purchaser's account would occur at some point in the future.
A further featuer which could be incorporated in such a system utilizing a credit card-like device would be a normal credit card function which could be utilized at a wide variety of different stores with all charges going into a central clearing house for charging to a particular account. A number of systems of this nature are currently in wide usage throughout the country.
In addition, the normal large store type of credit account wherein the store has its own credit plan, could also be accommodated within the single credit card-like device.
All of the above desired features of such a system could optimally be contained on a single credit card-like device wherein the customer would indicate the type of account and procedure which he desires to utilize as well as giving his appropriate account numbers or other identifying information.
At this point, in order for such a system to be practical, it should be noted that it would be very desirable to provide a device which would, in effect, interface between the individual's credit card-like device and the various terminal devices which would be present in stores and the like such as, point of sale terminals, cash issuing terminals and the like which would give the individual control over the type of transaction that is ultimately entered into his card. Present business practices, including the use of credit cards in stores, take the credit card out of the individual's possession for a short time, and unauthorized access to certain of the individual's financial data could readily be obtained by such stores during this short time. By suitably designing an interface device it is possible to limit access to the credit card-like device to only a particular account or data designated by the individual. Optimally, the design would also limit access to only certain specified information regarding an account. Thus, such an interface device, if suitably designed could provide the individual with control over his card and the data therein, giving a much higher degree of financial protection to the individual both from inadvertent mistakes and deliberate misuse.